© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Earnings Announcement – Second Quarter FY 2015-16
October 29, 2015
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Certain statements in this release concerning our future prospects are forward-looking statements. Forward-looking statements by their natureinvolve a number of risks and uncertainties that could cause actual results to differ materially from market expectations. These risks anduncertainties include, but are not limited to our ability to manage growth, intense competition among Indian and overseas IT companies, variousfactors which may affect our cost advantage, such as wage increases or an appreciating Rupee, our ability to attract and retain highly skilledprofessionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability tomanage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, ourability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies inwhich Polaris has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capitalor acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry.Polaris may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. Theseforward-looking statements represent only the Company’s current intentions, beliefs or expectations, and any forward-looking statement speaksonly as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements.
Safe Harbor Statement
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
• Revenues at Rs. 517.68 crore registering 4% QoQ growth and YoY growth of 9%
• Revenue in USD Terms, stood at $77.63 Mn growing sequentially by 2% as
compared to $75.9Mn in Q1 FY16
• EBITDA at Rs. 70 crore registering 10% QoQ growth; 16% YoY growth
• Profit After Tax (PAT) stood at Rs. 47 crore registering 24% QoQ growth
• Cash and Cash equivalent stood at Rs. 294 crore
• Revenues were distributed across all geographies with the Americas contributing
52%, Europe 21%, India 8% and Rest of the World 19%
Key Financial Highlights
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
• 4 New clients were added reflecting client confidence in our digital strategy
• The company has a talent strength of 7648 ( Excl. BPO division)
• Attrition in Q2 FY16 stood at 12.98%
• Polaris rated as a "Major Contender in Capital Markets AO Delivery Capability"
by Everest Group
• Polaris ranked amongst the Global Top 100 vendors by IDC in their Fintech
Ranking
Key Business Highlights
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
5
Q2 FY 16 Business Financials
Particulars
QUARTER ENDED YEAR ENDED
September 30,
2015
June 30,
2015
September 30,
2014
March 31,
2015
INCOME
Income from Software development, Support & BPO services
51,767.88 49,583.48 47,689.79 189,334.54
EXPENDITURE
Software development expenses 36,514.04 35,153.44 35,103.42 139,964.80
Selling & Marketing and General & Administrative
expenses 8,253.45 8,050.64 6,529.16 26,860.97
Total Expenditure 44,767.49 43,204.08 41,632.58 166,825.77
Profit before interest, depreciation &
amortisation other Income, foreign exchange
gain/ (loss), exceptional items & tax7,000.39 6,379.40 6,057.21 22,508.77
Depreciation and Amortisation expenses687.49 674.59 690.46 2,790.87
Profit before other Income, foreign exchange
gain/ (loss), exceptional items & tax6,312.90 5,704.81 5,366.75 19,717.90
Foreign exchange gain/ (loss) 233.34 (445.04) 389.74 1,182.81
Other Income including exceptional items 153.68 450.27 968.41 2,242.24
Profit before tax 6,699.92 5,710.04 6,724.90 23,142.95
Provision for taxation 1,967.23 1,902.95 1,809.67 6,422.28
Profit after tax 4,732.69 3,807.09 4,915.23 16,720.67
Minority Interest/ Share of profit/(loss ) of Associate
Companies1.74 1.48 - 6.31
Profit for the period 4,734.43 3,808.57 4,915.23 16,726.98
Rs. Lakhs
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Europe
India
RoW
Americas
Europe
India
RoW
Americas
53%Europe
20%
India8%
ROW19%
Q1 FY 16
Americas52%
Europe21%
India8%
ROW19%
Q2 FY 16
Americas55%
Europe
20%
India 7%
ROW
18%
Q2FY 15
Revenue: Geographic Distribution
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Retail
Corporate
Retail
Corporate
Insurance &Others
Retail
Corporate
Insurance &Others
Treasury & Capital Markets
Treasury & Capital Markets
Revenue: Vertical Split
Treasury & Capital Markets
47%
Corporate Banking
22%
Retail Banking
15%
Insurance
& Others
16%
Q2 FY 16
Treasury
& Capital markets
47%
Corporate Banking
22%
Retail Banking
14%
Insurance
& Others
17%
Q1 FY 16
Treasury
& Capital
markets50%
Corporate banking
22%
Retail
Banking
12%
Insurance & Others
16%
Q2 FY 15
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Retail
Corporate
Retail
Corporate
Insurance &Others
Retail
Corporate
Insurance &Others
Treasury & Capital Markets
Treasury & Capital Markets
Revenue: Service Offering
Appl Dev46%
App Main39%
Testing 14%
Others1% Q2 FY 16
App dev
46%
App Main38%
Testing
16%
Others1% Q1 FY 16
App Dev44%
App Main39%
Testing16%
Others1% Q2 FY 15
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Revenue by Q2FY 16 Q1FY16 Q2 FY15
Fixed Bid 38.8% 38.8% 38.7%
Time & Material 61.2% 61.2% 61.3%
Onsite Offshore Ratio - By Efforts
Q2 FY 16 Q1 FY16 Q2FY15
Onsite 21% 21% 22%
Offshore 79% 79% 78%
DSO
Q2 FY 16 Q1 FY16 Q2 FY15
Billed 45 45 46
Unbilled 38 40 43
Total 83 85 89
Capacity Utilization 76.5% 76% 81%
Q2 FY 16 Financial Metrics
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Q2 FY 16 Financial Metrics
Q2 FY 16 Q1FY16 Q2FY15
Cash & Cash Eqv (INR Cr)
294 318* 339
Major Cash Outflow Items
Capex: Rs 4.4 CrDividend payment (including DDT) 120 Crs
Capex: Rs 7.7 CrDividend payment Rs 50 cr
Div & div tax payout : 71 Cr
Capex : 3.76 Cr
USD INR Rate Q2 FY 16 Q1 FY16 Q2 FY15
Average Rate 64.91 63.49 60.57
Closing Rate 65.59 63.65 61.75
* Includes balance in unpaid dividend A/c of Rs. 101 Cr
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
Jitin Goyal, CEO and Executive Director, said:
“Our strategic focus on Digital is beginning to pay offwith strong digital led wins in this quarter. We continueinvesting in the core areas of Digital, Data, Paymentsand Risk & Compliance and we are gaining goodtraction in the market in these areas, reflected in thesteady build-up in the deal pipeline. Revenue andEBITDA are both trending in the right direction, and thisis a good sign”.
11
Management View
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
NM Vaidyanathan, Chief Financial Officer, said:
“Our focused approach towards growth plans & costplans has resulted in 9% growth in Revenues and a PATof Rs 47 Cr. We are balancing the levers of investmentsin key accounts along with cost optimisation efforts. Weexpect this momentum to continue"
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Management View
© 2015 ǀ ©Polaris Consulting & Services Ltd. ǀ Company Confidential
COPYRIGHT NOTICE
© 2015 Polaris Consulting & Services Ltd.All rights reserved. These materials are confidential and proprietary to Polaris and no part of these materials should be reproduced, published in any form by any means, electronic or mechanical including photocopy or any information storage or retrieval system nor should the materials be disclosed to third parties without the express written authorization of Polaris Consulting & Services Ltd..